Investing.com - Gold prices rose on Tuesday after the dollar fell a day ahead of the release of the Federal Reserve's minutes from its July policy meeting, which many hope will reveal the fate of monetary stimulus measures.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, making gold an attractive hedge while such policies remain in place.
Gold and the dollar tend to trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,373.00 during U.S. afternoon hours, up 0.53%.
Gold prices hit a session low of USD1,351.90 a troy ounce and high of USD1,376.80 a troy ounce.
The December contract settled down 0.39% at USD1,365.70 a troy ounce on Monday.
Gold futures were likely to find support at USD1,315.40 a troy ounce, Wednesday's low, and resistance at USD1,384.00, Monday's high.
The Federal Reserve will release the minutes of its July monetary policy meeting on Wednesday, and uncertainty over when stimulus programs will begin to taper weakened the dollar on Tuesday, especially after the release of a disappointing economic output gauge earlier.
The Federal Reserve Bank of Chicago’s national activity index for July hit -0.15 from a revised -0.23 in June, though the number came in much worse than market expectations for a -0.10.
The data sparked a dollar selloff by keeping expectations alive for many that the Federal Reserve will begin tapering stimulus tools in December as opposed to September, which boosted gold prices.
Elsewhere on the Comex, silver for September delivery was down 0.01% at USD23.163 a troy ounce, while copper for September delivery was up 0.22% and trading at USD3.339 a pound.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases tend to weaken the dollar by driving down interest rates, making gold an attractive hedge while such policies remain in place.
Gold and the dollar tend to trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,373.00 during U.S. afternoon hours, up 0.53%.
Gold prices hit a session low of USD1,351.90 a troy ounce and high of USD1,376.80 a troy ounce.
The December contract settled down 0.39% at USD1,365.70 a troy ounce on Monday.
Gold futures were likely to find support at USD1,315.40 a troy ounce, Wednesday's low, and resistance at USD1,384.00, Monday's high.
The Federal Reserve will release the minutes of its July monetary policy meeting on Wednesday, and uncertainty over when stimulus programs will begin to taper weakened the dollar on Tuesday, especially after the release of a disappointing economic output gauge earlier.
The Federal Reserve Bank of Chicago’s national activity index for July hit -0.15 from a revised -0.23 in June, though the number came in much worse than market expectations for a -0.10.
The data sparked a dollar selloff by keeping expectations alive for many that the Federal Reserve will begin tapering stimulus tools in December as opposed to September, which boosted gold prices.
Elsewhere on the Comex, silver for September delivery was down 0.01% at USD23.163 a troy ounce, while copper for September delivery was up 0.22% and trading at USD3.339 a pound.